Offshore

Department of Interior proposes second Gulf of Mexico offshore wind sale

Department of Interior proposes second Gulf of Mexico offshore wind sale
(Photo by Nicholas Doherty on Unsplash)

The Department of the Interior announced its proposal for a second offshore wind energy auction in the Gulf of Mexico. The proposed lease sale includes four areas offshore Louisiana and Texas, totaling 410,060 acres.

In October 2023, the Bureau of Ocean Energy Management (BOEM) designated for wind development four tracts of federal Gulf of Mexico waters off the coasts of Texas and Louisiana, ranging in size from nearly 57,000 acres (23,100 hectares) to over 495,000 acres (200,230 hectares).

BOEM is seeking feedback on various aspects of the proposed lease areas, including the size, orientation, and location of the four lease areas. BOWM would also like to know which areas, if any, should be prioritized for inclusion or exclusion from this lease sale. BOEM is also seeking comment on potential lease revisions to include the production of hydrogen or other energy products using wind turbine generators on the lease. 

“Today’s announcement is another step forward in the Biden-Harris administration’s pursuit of building a clean energy future and permitting 30 GW of offshore wind energy capacity by 2030,” said Secretary Deb Haaland. “We are taking action to jumpstart America’s offshore wind industry and using American innovation to deliver reliable, affordable power to homes and businesses, while also addressing the climate crisis.”    

BOEM is proposing to conduct simultaneous auctions for each of the four lease areas using multiple-factor bidding. BOEM will use new auction software, with minor adjustments to auction rules used in previous offshore wind lease auctions.  

The Proposed Sale Notice will be published in the Federal Register on March 21, initiating a 60-day public comment period ending on May 20, 2024. If BOEM decides to proceed with the auction, the next step would be the publication of a Final Sale Notice.  

Last August, RWE secured the right to develop an offshore wind project in the Gulf of Mexico during a lease auction that drew minimal interest from the industry. The lease auction conducted by the Bureau of Ocean Energy Management lasted just two rounds and concluded less than two hours after it began. Two areas offshore Texas — Galveston I and Galveston II — did not receive any bids. RWE’s winning bid of $5.6 million for the right to develop a third area, 102,480 acres offshore Lake Charles, Lousiana, was one of only three bids submitted during the auction.

If fully developed, the area offshore Lake Charles, Louisiana could support 1,244 MW of generating capacity and power 435,400 homes, BOEM said.

The Gulf of Mexico offshore wind auction was never expected to draw the same level of interest as previous auctions in the Northeast, in part due to shallower waters, low wind energy potential, and hurricane risks. It could also be tied to industry-wide headwinds, like inflation and interest rates, that have led to the dissolution of power purchase agreements for several of the country’s first projects.

This article includes reporting from the Associated Press.